12/1/22 A Dead Bear & The S&P 500’s Major Breakout


On Wednesday, markets opened near flat and drifted lower throughout the morning session.

At 1:30 pm, Fed Chair Powell delivered an update from the Brookings Institution in New York. He said…

  • “Inflation remains far too high”
  • But “October inflation data … showed a welcome surprise”
  • He warned the Fed’s “monetary policy” can cause “uncertain lags.”
  • He concluded that “moderating … rate increases may come as soon as the December meeting.”
Image by Bloomberg

It was everything the market hoped to hear and more. Markets ripped higher and closed at their session highs.

  • Dow Jones +2.2% (Exiting bear market)
  • Nasdaq +4.4%
  • S&P 500 +3.1% (Major Breakout — see technicals)
  • Russell 2000 +2.7%

Another notable development, annualized Q3 GDP was revised higher from 2.6% to 2.9%. This reading indicates that the U.S. may not be heading for a recession.

Markets ended November with a second month of gains.

Sector Round Up

All 11 sectors ended the day green.

Leading the charge…

  • Technology (XLK) +5.0%
  • Communications (XLC) +4.2%
  • Consumer Discretionary (XLY) +3.5%

At the bottom…

  • Energy (XLE) +0.5%
  • Industrials (XLI) +1.7%
  • Financials (XLF) +1.7%

Bitcoin’s Bounce

Image from StocksToTrade

Bitcoin^ joined in the rally as well. This morning it’s trading near $17,200.

  • Its highest level in about two weeks
  • About a 10% gain from last month’s lows


The S&P 500 smashed through its 200-day moving average…

SPY Daily Candles – Chart via thinkorswim

This critical level acted as resistance in April and August. Yesterday’s closed showed significant momentum behind the bulls.

Our signals generally align with the bulls…

The oversold conditions could be setting up a squeeze. 

We remain long both SPXL & TQQQ to capture the seasonal momentum. Both positions show significant gains, 31% and 22%, respectively.


While Powell’s remarks boosted the market, we still have a ton of inflation data to get through before the new interest rate is released.

Over the next two days, we’ll get an update on the labor market.


*Low Float
^Open Position

*USEA support at $3
*BBW support at $22
*NINE support $10
*UCL support at $3.50
TITN on watch
AVDL support at $9
PDSB resistance at $9, support at $8
SCPH support at $7
AXSM support at $70
AVDL support at $9
PBYI support at $4
WNC support at $24, resistance at $26
RCUS support at $31
^MANU resistance at $23
^CROX support at $100
^RYAM support at $7, resistance at $8
CPRX support at $16
GEO support at $10.50
ADMA support at $3
MNSO support at $11
TME on watch
GILD support at $86

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